Joe Hockey has vowed to focus on jobs and families this year and ignore “idle comment” about the government’s political woes.
The treasurer refused to comment directly on a damaging leak suggesting a split between him and Tony Abbott over the now-shelved cut to the Medicare rebate for short visits to the GP, saying he would not discuss “gossip”.
Hockey preferred to look forward to the families package to be developed by the new social services minister, Scott Morrison, which would include changes to the childcare system.
“This year is the year of jobs and families for the commonwealth government and that’s what we’re focused on,” Hockey told 3AW on Monday.
Abbott returned to work from annual leave on Monday, but the prime minister’s hopes of a fresh start in 2015 were dashed by continuing political fallout over the ill-fated changes to Medicare rebates.
News Corp reported on Sunday that Hockey and the then health minister, Peter Dutton, had opposed the $20 cut to rebates for visits shorter than 10 minutes – an element of the government’s “Plan B” co-payment package announced in December.
Abbott insisted on the measure, the report said, but then bowed to pressure last week to shelve it four days before it was due to take effect.
Asked whether the leak from the expenditure review committee was wrong, Hockey said: “I’m not going to engage in discussion on gossip. We made a decision. It was a unanimous decision. We hear what the doctors are saying; we hear what the medical professionals are saying.”
Hockey acknowledged the original decision could have had negative impacts, a point made by the Australian Medical Association and other groups that campaigned against the measure.
“Sometimes it’s better to reverse a position than to continue with a decision that’s going to have bad ramifications,” he said.
The treasurer said the new health minister, Sussan Ley, would consult doctors and the public about how to ensure the system was sustainable, but the government was not inclined to further increase the 2% Medicare levy.
Hockey said he was more positive about Australia than he had ever been and the government must proceed with difficult decisions including changes to welfare and the higher education system.
He also indicated he was concerned about the global competitiveness of Australia’s personal income tax rates, claiming the highest earners paid nearly half their income to the government.
In fact, the top marginal tax rate of 45c in the dollar applies only to the portion of income that is earned above $180,000.
Hockey raised concerns about bracket creep – the phenomenon whereby rising incomes push people into higher tax brackets.
“We’ve got to bear in mind that bracket creep is going to take middle income Australians into the second-highest tax bracket over the next few years, which is a disincentive for people to work, and at the same time we’ve got to recognise that there is a lot of competition for corporate investment,” he said.
Asked whether tax relief for families was possible this year, Hockey said: “Well, we did have it last year … There is a scheduled tax cut that is still on the books to kick in this year, and that’s a change in the threshold that is a legacy from the carbon tax.”
The treasurer was referring to a further increase in the tax-free threshold that was legislated by the former Labor government to take effect in July 2015. The former government deferred the tax cut in its final budget but never legislated the change.
When the Coalition tried last year to repeal the scheduled tax cut, Labor joined the Greens and other crossbenchers to block the bill in the Senate.